Comprehensive package of measures to help European farmers

The European Commission presented on 7 September a EUR 500 million comprehensive package of measures to support European farmers.

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1) To help farmers in short term cash flow difficulties

a) Targeted aid:
The most significant part of the comprehensive package will be provided
to all MS in envelopes to support the dairy sector. The Commission is
working on a package of targeted aid for all Member
States, having particular regard to those Member States which have been
most affected by market developments. The Commission will shortly
finalise the distribution key for these national envelopes.

b) Advancing Direct payments: Member States can pay up to 50%
of their direct payment envelope from 16 October, provided that the
necessary controls have been carried out. (Usual earliest date is
December 1 – but existing rules already provide this flexibility.) The Commission will now propose toincrease this to 70% - draft legislation in preparation.

c) Advancing certain Rural Development payments:
Member States can already advance the area and animal-related payments
for rural development (such as agri-environment, organic farming, areas
with natural constraints, animal welfare) by paying up to 75% from October 16. The Commission willnow propose to increase this rate to 85%.

In addition to this:

d) Financial instruments:
The Commission is working closely with the European Investment Bank
(EIB) on options for establishing financial instruments (NB Rural
Development Programmes can be used for this). For example, Commission is
working on designing Financial Instruments where re-payment schemes are
linked to commodity price developments.

e) Income stabilisation tool: Member
States/regions already have the option to include an income
stabilisation tool in their Rural Development Programmes. Only a few
Member States have programmed this tool, but it could be introduced by
others with the next modification of Rural Development Programmes.

a) Extending & Enhancing Private Storage Aid:
In order to ease market pressure, the Commission has already extended
the private storage aid and public intervention periods for butter and
skimmed milk powder until next year. The Commission is now working on an
enhanced scheme for SMP focusing on higher aid levels as well as on
ways to ensure that the product is stored for the appropriate time to
make the scheme even more effective in alleviating pressure on the
supply side.

b) A new private storage scheme for pigmeat: the Commission is ready to table a proposal to open a new PSA scheme for pigmeat.

c) Promotion programmes: The Commission will increase the promotion
budget in 2016 in addition to the €81 million already committed. A
specific part of that enlarged budget will be reserved for the dairy and
pigmeat sectors. The reformed promotion policy
which also foresees higher co-financing rates (from 50 to 70-80%), a
broader list of eligible products (including generic pigmeat promotion
on the internal market), and a gradually increasing budget (up to 200
million € in 2019).

d) Information on Promotion opportunities: The Commission will set up with Member States an extensive series of information workshops on the new promotion rules to secure the best possible use of increased the new rules and the increased funding.

e) Strengthening of the Milk Market Observatory: For better market transparency, the Commission will continue to reinforce the Milk Market Observatory
by further focusing on the type of information, the accuracy and the
prompt publication of this information. Already over 30 000 people
consult the new data on the MMO website every Thursday and the aim is to
make the MMO the benchmark for the EU milk market.

f) Bilateral Trade Agreements: The
EU has worked hard on a range of free trade agreements (the Balkans,
CARIFORUM, Central American countries, South Korea, Morocco, Peru,
Colombia, Moldova, Georgia, Ukraine), the most recent being with Canada
and Vietnam. In the trade agreement with Vietnam, dairy tariffs will be
reduced from a maximum of 19% to zero within 3-5 years. Negotiations are
ongoing with significant markets such as the USA and Japan.

g) Tackling non-tariff barriers which block EU exports to non-EU markets: The Commission (DG SANTE, DG AGRI, DG TRADE) is working to resolve a number of Sanitary & PhytoSanitary (SPS) and technical barriers to trade (TBT)
issues with third country partners. In 2014, specific SPS trade
barriers for dairy products were resolved with Chile, China, Japan and
S. Korea. Most recently, for African Swine Fever, the USA has accepted
the EU regionalisation decisions, i.e. instead of listing Member States
or regions individually, it will list any restricted zone in the EU
established by the EU or any EU Member State. In concrete terms, this
means that meat from cattle, sheep, pigs and goats slaughtered in
Lithuania and processed in certified Lithuanian establishments is now
eligible for export to the USA. The EU has also taken Russia to the WTO
over its totally disproportionate EU-wide ban on all pigmeat products
linked to African Swine Fever in 4 Member States.

h) Opening new markets: Commissioner Hogan himself has scheduled a number of promotion visits to third countries
where important opportunities exist for EU agriculture and to help open
doors for new exports. Already, Commissioner Hogan is committed to
visits to China and Japan later this year and to Mexico and Colombia
early in 2016.

In addition to this:

i) Using Rural Development Programmes: The 2014-2020 Rural Development Programmes also include 600 million EURO for quality products and promotion.
Member states/regions have the possibility of increasing this envelope,
provided that this is in line with the programmes' underlying strategy.
Moreover, Member States/regions have several other options under their
RDPs to provide a wider range of effective measures to boost competitiveness, to preserve and valorise specific local production systems, or to accompany the restructuring of a sector, such as the dairy sector. There is also the option for support for restoring agricultural production potential damaged by natural disasters and catastrophic events,
which has potential for the pigmeat sector, in order to have a
ready-to-use measure at hand in case of an outbreak such as the African
Swine Fever.

(3) To tackle supply chain challenges

a) Establishing a new High Level Group:
The Commission will set up a new, dedicated High Level Group to focus
on a number of specific and clearly defined issues. This will include credit for farmers, and financial and risk hedging instruments such as futures markets for agricultural products.
On this HLG, Commissioner Hogan will work closely with Commissioner
Bienkowska. (A High Level Group normally comprises senior officials from
national Ministries.)

b) Evaluating the Milk Package and encouraging wider use of certain measures: The Commission will bring forward to 2016 the report on the (2012) "milk package"
originally foreseen for 2018, in order to consider its possible
prolongation and improvement, including the extension of its provisions
to other sectors. Introduced as a response to the 2009 dairy crisis, the
Milk Package provides a range of measures aimed at giving producers a
stronger position in the dairy supply chain, such as written contracts,
collective bargaining, encouraging Producer Organisations, but the
take-up has been slow in some regions because market conditions have
been relatively favourable since 2012. The Commission will also promote
similar provisions under existing rules for other sectors, e.g. for
producer organisations etc.

c) Improving exchanges of experience, e.g. on unfair trading practices: The
Commission will also organise a range of meetings to discuss
experiences and share best practices. For example, on unfair trading
practices, discussion can look at how the code of conduct is working and
the experiences in Member States such as Spain and the UK. There is
also the potential for events to discuss financial and risk hedging instruments, such as forward contracts, futures markets, etc.

(4) To tighten the link between agriculture and society at large:

a) Addressing the needs of vulnerable groups:
In the context of the current refugee crisis, there are ways of
addressing the nutritional needs of refugees, for example through the
distribution of dairy products.

b) The scheme for school fruit and school milk: Under the present School Milk Scheme,
there is room for increasing the use of the EU support for milk
distributed to schoolchildren. (Unlike for the School Fruit Scheme,
there is no financial ceiling per Member State.) Moreover, the
Commission will work with the Council and parliament to try and reach an
early conclusion in the ongoing negotiations for a wider school scheme currently in negotiation.

In addition to this:

State Aids: There are also a number of tools that can be mobilised at national level. Member States have the possibility of providing national funding under the de minimisrules
(below €15.000 for agricultural primary production or €200.000 for
marketing and processing activities over 3 years). Even outside RDPs,
Member States may use State aids, for example aid for
investments, for agri-environment-climate or animal welfare commitments,
for organic farming, or for the participation in quality schemes, etc.
Under certain conditions, State Aids can also cover promotion, the
closure of production capacity and, under strict conditions, rescue and
restructuring aid for companies in severe financial difficulties, etc.